digital Smart Connected Products Field Notes Fall 2016

digital Smart, Connected Products: Field Notes Fall 2016

Smart, Connected Products aka “the Internet of Things” (Io. T) The nature of “products” is changing; embedded sensors, processors, and connectivity to` databases “in the cloud” [on the Internet] drive dramatic improvements in functionality and performance, creating opportunities for new revenue streams, profitable growth, innovation and differentiation. At the same time, these “smart, connected products” [SCPs] can and will change how value is created and captured, how companies partners with customers and suppliers, and how competitive advantages will be redefined. How Smart, Connected Products Are Transforming Competition, Porter + Heppelmann, HBR Nov 2014 How Smart, Connected Products Are Transforming Companies, Porter + Heppelmann, HBR Sep 2015 Consumer Fitness Trackers Vehicle Monitoring Home Control Industrial Tools Fleet Management Industrial Controls Industrial

Where is value created? Feature / Function BU Operations Product Management Channel Partners End Customers Notifications and Alerts Customer Service, Warranty Input to Design Service, Training Revenue Save Effort, Prevent Loss Product Adoption / Usage Customer Service, Warranty Market, Channel Performance Revenue Growth Prevent Loss Saves Effort Input to Design Saves Money Predictable Performance Service Revenue Saves Effort Monitoring Remote Troubleshooting Control Remote Operation Service Revenue System Tuning Service Revenue Predictive Maintenance Service Revenue Optimizes Performance Optimization Service Revenue Data Collection and Self-Tuning Input to Design Ecosystem Interaction, Coordination Input to Design Save Effort, Prevent Loss Optimizes Performance Autonomy Revenue Growth Optimizes Performance • Value is created via top line growth. . . (new revenue, market share), bottom line savings. . (productivity, optimization) • Customer service & loss prevention is harder to quantify – but an important part of the Value Selling conversation Larger value opportunity from profitable organic growth

SCP Framework Communicating from the Field On-Board Data Collection Devices In the Field g in ild Bu Raw Data, Multiple Sources Bl oc ks Products that Solve Problems

Observations ü 5 -Step Framework for Io. T Where is the sticking point? ü Creating Value Customers, channel, and internal ü Focus on Benefits What would you pay … ü No Impossible Problems Keep looking ! ü Fit your Strategy Organic growth, market forces ü “Lean Startup” Methodology MVP, Vo. C, failing fast … ü Establish a Seed Fund Innovation is starved for resources

Smart, Connected Products: Field Notes APICS – Fox River Chapter Geneva, IL 21 Sep 2016 James P. Mac. Lennan SVP & Chief Information Officer IDEX Corporation 1925 West Field Court Lake Forest, IL 60045 (847) 664 4775 jmaclennan@idexcorp. com www. cazh 1. com 20160921 SCP Field Notes. PPTM